Do restaurants really expect Australian diners to leave a tip?

WE KNOW the majority of Australians are opposed to a local tipping culture. But what does the industry think?

But the head of the Restaurants and Catering Industry Association of Australia, John Hart, conceded that when it comes to tipping, it’s too late.

“The horse has already bolted and you can’t go backwards,” he told news.com.au. “You can’t overlay what is the highest wage cost base in the world with a tipping culture. That has pushed us to point where there is virtually no latitude for customers to leave a tip.

Mr Hart said tipping is more likely to occur at higher-end venues. But he said restaurants understand the environment and don’t expect the tipping culture to change.

Mr Hart said wage costs make up, on average, 40 per cent of a business’ turnover. He said wage costs are 50 per cent higher than the next most expensive cost base, which is goods.

Mr Hart said that while there is no legal requirement for restaurant owners to pass on tips to staff, in his experience, the vast majority of them do because otherwise GST would have to be applied to tips.

Tipping is the norm in the US where the minimum wage in hospitality is $2 to $3 an hour.Source:Supplied

He said restaurant owners are more concerned about the imminent changes that will happen when credit card signatures are phased out later this year. Mr Hart said there will be huge changes to restaurants, which may have to invest in multiple EFTPOS terminals.

“One of the concerns is a reduction in tips,” he said. “They have an important place, it’s extra income for the staff.”

As for whether it’s common practice to restaurants to keep track of their customers’ behaviour, including their tipping habits, Mr Hart said it’s only a small proportion of businesses that would be using systems like ResDiary, an electronic reservations system.

The lack of a tipping culture in Australia is largely down to our wage structure which sees a minimum wage (around $17 an hour) mandated on hospitality pay. This is in stark contrast to the United States, where there is a strong tipping culture but minimum hospitality wages of between $2 and $3 an hour.

Signing for your meals is to be a thing of the past.Source:Supplied

The hospitality workers’ union United Voice acting national secretary David O’Byrne said he wouldn’t want to see Australian move to an American-style tipping culture.

He said: “Staff in the US are effectively begging for a weekly wage. You can’t plan your life, you can’t get a loan and you get caught in a poverty trap. My first job was as a porter in a hotel and you got tips from time to time but you can’t plan what that’s going to be.

“I’ve spoken to workers in the US and it’s not a dignified life. In Australia, tips are a gratuity and people who go to work deserve to have dignity. There’s no substitute for decent wages, training and culture.”

Mr O’Byrne said the issue of tipping is raised, his members are fearful of moving to a US-style system.